Construction Dispute

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Dur v. Western Branch Diesel, Inc.
2007 U.S. App. LEXIS 16237 (4th Cir. July 9, 2007)
Following the precedent of the Supreme Court of Virginia in Sensenbreunner v. Rust. Orling & Neale, Architects, Inc., 374 S.E.2d 55 (Va. 1988), the Fourth Circuit Court of Appeals upheld the district court’s grant of a motion for summary judgment. The Court held that damage to an owner’s boat caused by an electrical fire fell within the scope of the contract between the owner’s general contractor and the subcontractor and amounted to nothing more than economic loss, which barred the owner from maintaining a cause of action for negligence against the subcontractor.

Mellon v. Shriners Hospitals for Children
2007 Mass. Super. LEXIS 188 (Mass. Super. Ct. June 26, 2007)
The Superior Court of Massachusetts recently considered whether an architect of record on a construction project owed a duty to a third party construction worker on the project for injuries sustained as a result of improper installation of grates. To resolve this issue, the Court found that the whether a duty was owed rested on the language of the architectural services agreement at issue and the level of control the Architect exerted on the job site.

U.S. ex. rel. Straightline Corp. v. American Casualty Corp.
2007 U.S. Dist. LEXIS 50688 (N.D. W. Va 2007)
The United States District Court for the Northern District of West Virginia held that a “pay-if-paid” clause was not a valid defense to a Miller Act claim. Straightline, involved a contract dispute…

Trinity Church v. Atkin
925 A.2d 720, 2007 N.J.Super.LEXIS195 (N,J, Super, App. Div., June 27, 2007)
Contractual clauses providing for the date of accrual on construction projects are valid in New Jersey. The Superior Court of New Jersey, Appellate Division, affirmed summary judgment in favor of defendants who allegedly performed defective renovation and construction work on a historical building because the plaintiff failed to file a timely action within the period of the statute of limitations.

Integrated Project Services v. HMS Interiors, Inc.
2007 Pa. Super 246, 2007 Pa. Super. LEXIS 2606 (Pa. Super Ct., April 16, 2007)
This is an appeal from a decision in the lower court wherein a general contractor, “Integrated Project Services, (“General Contractor”) sued a subcontractor, HMS Interiors, Inc. (“Subcontractor”) for a declaratory judgment that the Subcontractor was obligated to indemnify the General Contractor for the General Contractor’s negligence. The Subcontractor filed a motion for judgment on the pleadings which was granted by the lower court and the General Contractor appealed that decision.

Carlson v. SALA Architects, Inc.
2007 Minn. App. LEXIS 74
The of Minnesota Court of Appeals reversed entry of summary judgment in favor of a purchaser of architectural services, holding, among other things, that the relationship between an architect and its client is not per se a fiduciary relationship. Rather, the Court held that whether a fiduciary relationship exists was a question of fact which was unable to be resolved on summary judgment.

EBWS, LLC v. Britly Corporation
2007 VT 37; 2007 Vt. LEXIS 69 (Vt. May 25, 2007)
The Vermont Supreme Court held that the cost of an owner’s anticipated voluntary payments of employee wages and for product purchases during the temporary shutdown of a creamery pending repair of construction defects were not recoverable consequential damages because they could not reasonably have been within the contemplation of the defendant when it contracted to build the creamery.

S.M. Wilson & Company v. Urban Concrete Contractors
2007 Tex. App. LEXIS 3747, No. 04-06-00227-CV (Tex. Ct. App., May 16, 2007)
A Texas Court of Appeals held that an oral change order agreement to pay for work which was, in fact, within the scope of the original contract was unenforceable for lack of consideration.
S.M. Wilson & Company (“Wilson”) entered into a contract with the Target Corporation to construct a Target Store in Austin, Texas (the “Project”). Wilson then solicited bids from subcontractors for various aspects of the Project. Urban Concrete Contractors, Ltd. (“Urban”) submitted a bid to Wilson to perform concrete work on the Project. During the pre-bid process, Wilson sent a proposed contract including Work Package 03300, which identified the scope of concrete work that Urban would be responsible for. Work Package 03300 referred to two sets of plans describing the concrete work to be performed which were not included in the package but were available to Urban for review at no charge prior to bidding.

Charles T. Driscoll Masonry Reconstruction Co., Inc. v. County of Ulster
2007 N.Y. App. Div. LEXIS 6068 (N.Y. App. Div., May 17, 2007)
The Appellate Division of the Supreme Court of New York held that a construction contract must be enforced according to its terms and, therefore, oral modifications of an agreement which specifically calls for modifications to be in writing will be unenforceable. Although recognizing that written modification clauses may be waived based upon the conduct of the parties, the court found that the conduct of the parties in this case did not support a waiver.

Hutton Contacting Company, Inc. v. City of Coffeyville
2007 U.S. App. LEXIS 9914, (10th Cir., April 30, 2007)
Contractor contracted to construct power and fiber-optic lines for the City. Upon completion of the project, the City refused to pay the final balance of the contract price, claiming that it was entitled to the funds as liquidated damages because the project was not completed on time. The Contractor sued to obtain the unpaid contract balance. The trial court ordered the City to pay the Contractor the retainage due minus $85,000 in liquidated damages. On appeal, the United States Court of Appeals for the Tenth Circuit, applying Kansas law, considered: 1) whether the contract’s force-majeure clause excused the Contractor for delays caused by late deliveries from its pole supplier; 2) whether the contract’s liquidated-damages provision was enforceable; and 3) whether the contract’s liquidated damages provision allowed the District Court to apportion delays between the Contractor and the City.